According to a report from ChainCatcher and Bitcoin.com, the IRS has issued a temporary relief measure that is expected to benefit CeFi exchange users in 2025. This relief addresses concerns raised by the final version of Regulation 6045 for custodial brokers, which will take effect on January 1, 2025, requiring the use of a first-in, first-out (FIFO) accounting method for digital assets unless a preferred method such as highest-in, first-out (HIFO) or Spec ID is chosen.
Cointracker's tax strategy lead Shehan Chandrasekera explained the issue, emphasizing that "as of January 1, 2025, almost all CeFi brokers are not yet prepared to support Spec ID." This lack of preparedness will force many cryptocurrency holders to default to FIFO accounting, potentially triggering higher tax burdens during asset sales. He described, "In a bull market environment, this could be disastrous for many taxpayers, as you might inadvertently sell the earliest purchased assets (often with the lowest cost basis) first while unknowingly maximizing your capital gains."
The temporary relief from the IRS allows taxpayers to continue using their own records or tax software to identify specific units being sold. The relief period only applies to CeFi transactions from January 1, 2025, to December 31, 2025. After this date, taxpayers will need to officially choose an accounting method with their brokers. Chandrasekera also emphasized the importance of synchronizing tax software with broker setups.